Tuesday, September 7, 2010

Monsanto (NYSE:MON) Under Investigation for Marketing Practices

The Attorney General of Arkansas, Dustin McDaniel, has launched an inquiry into how Monsanto (NYSE:MON) has marketed its Roundup Ready 2 Yield soybean trait.

McDaniel is asking for Monsanto to back up its claims the higher number of trait indeed product higher yields than lower cost competitor seeds, which have less traits.

This sounds like a DuPont (NYSE:DD)-inspired investigation, as their Pioneer seeds are the major low-cost competitor against Monsanto, and have been competing on price versus the number of traits offered by Monsanto as their strategy for gaining market share.

Monsanto recently cited the higher yields as a reason for their announcement they're going to raise prices on the soybean seed, which evidently instigated the inquiry.

But I'm not sure why Monsanto would have an investigation against them, as they can put whatever price they want on the seeds, and farmers can decide if they want to buy them or not.

The other odd thing, is Monsanto claims there were no farmers in Arkansas who planted the soybean seeds in 2009, which if true, makes it strange that the attorney general for Arkansas would have any legal interest in the company at all.


Anonymous said...

There was plenty of Roundup Ready 2 planted in Arkansas in 2010

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